Conflicts: The Basics - What Is a Conflict of Interest? continued
A lawyer may have a personal interest or economic interest (other than payment of reasonable fees) that conflicts with the client’s interest and impacts the lawyer’s ability to provide unbiased counsel. Each of the personal interest examples below may render your insurance void – see Exclusion 6 of the B.C. Lawyers' Compulsory Professional Liability Insurance Policy. Examples:
- You own 15% of the shares of a privately held company. Your client intends to purchase the company and take it public, and wants you to paper the deal.
- Your client wants to invest in your spouse’s free-range llama farm and asks you to help negotiate the deal.
- Your long-term client is having financial difficulties and you decide to loan him money to see him through a rough spot.
In addition to harming your reputation, engaging in a conflict of interest can:
- lead to an investigation and regulatory sanction by the LSBC;
- lead to civil liability for malpractice (even absent liability, defending such a claim takes time and costs money); and
- in a court or tribunal matter, lead to being removed as the solicitor of record by the court or tribunal.